U.S. Department of State 
Background Notes: Bolivia, March 1998
Released by the Bureau of Inter-American Affairs.



OFFICIAL NAME: Republic of Bolivia

PROFILE 

Geography

Area: 1.1 million sq. km. (425,000 sq. mi.); about the size of Texas and 
California combined.
Cities: Capital--La Paz (administrative--pop. 713,400); Sucre 
(constitutional--131,800). Other major cities--Santa Cruz (697,000), 
Cochabamba (407,800), El Alto (405,500). 
Terrain: High plateau (altiplano), temperate and semitropical valleys, 
and the tropical lowlands. 
Climate: Varies with altitude--from humid and tropical to semi-arid and 
cold. 

People

Nationality: Noun and adjective--Bolivian(s).
Population (1995 est.): 7.4 million. 
Annual growth rate: 2.4%.
Ethnic groups: 56% indigenous (primarily Aymara, Quechua, and Guarani), 
42% European and mixed. 
Religions: Predominantly Roman Catholic. 
Languages: Spanish (official); Quechua, Aymara, Guarani. 
Education: Years compulsory--ages 7-14. Literacy--80%. 
Health: Infant mortality rate--67/1,000. 
Work force (3.6 million): Non-agricultural employment: 1.26 million. 
Services (including government)--70%. Industry and commerce--30%.

Government 

Type: Republic. 
Independence: August 6, 1825. 
Constitution: 1967; revised 1994.
Branches: Executive--president and cabinet. Legislative--bicameral 
Congress. Judicial--five levels of jurisdiction, headed by Supreme 
Court.
Subdivisions: Nine departments.
Major political parties: Nationalist Democratic Action (ADN), Movement 
of the Revolutionary Left (MIR), Nationalist Revolutionary Movement 
(MNR), Conscience of the Fatherland (CONDEPA), Free Bolivia Movement 
(MBL), Civic Solidarity Union (UCS).
Suffrage: Universal adult, obligatory.

Economy (1997) 

GDP: $8.0 billion. 
Annual growth rate: 4.1%. 
Per capita income: $1,100. 
Natural resources: Hydrocarbons (natural gas, petroleum); mining (zinc, 
tungsten, antimony, silver, lead, gold, and iron).
Agriculture (14.9% of GDP): Major products--Soybeans, cotton, potatoes, 
corn, sugarcane, rice, wheat, coffee, beef, barley, and quinine. Arable 
land--27%.
Industry: Mineral and hydrocarbon extraction, manufacturing, commerce, 
textiles, food processing, chemicals, plastics, mineral smelting, and 
petroleum refining.
Trade: Exports (1997)--$1.19 billion. Major export products--natural 
gas, tin, zinc, coffee, silver, tungsten, wood, gold, jewelry, soybeans, 
and byproducts. Major export markets--U.S. (18.7%), U.K. (11.8%), 
Argentina (11.4%), Peru (11.1%), Colombia (9.5%). Imports (1997)--$1.74 
billion. Major products--machinery and transportation equipment, 
consumer products, construction and mining equipment. Major suppliers--
U.S. (17.0%), Japan (12.4%), Brazil (10.8%), Argentina (8.8%), Chile 
(6.9%), Peru (5.3%).
Exchange Rate: 5.38 Bolivianos=U.S.$1 (as of 2/98).

U.S.-BOLIVIAN RELATIONS

Relations between the United States and Bolivia are cordial and 
cooperative. The major issue in the bilateral relationship is control of 
illegal narcotics. Roughly one-third of the world's cocaine is made from 
coca grown in Bolivia: Bolivia's coca crop is second only to Peru's in 
the production of the cocaine alkaloid, and the country is second only 
to Colombia in the production of refined cocaine hydrochloride. For 
centuries, Bolivian coca leaf has been chewed and used in traditional 
rituals, but in the past few decades the emergence of the drug trade has 
led to a rapid expansion of coca cultivation, particularly in the 
tropical Chapare region. In 1988, a new law explicitly recognized that 
coca grown in the Chapare was not required to meet traditional demand 
for chewing or for tea, and the law called for the eradication, over 
time, of all "excess" coca. To accomplish that goal, the Bolivian 
Government instituted a program offering cash compensation to peasants 
who eradicated voluntarily and the government began developing and 
promoting suitable alternative crops for the peasants to grow. The 
Bolivian Government is now phasing out direct payments in favor of 
community-based incentives to eradicate coca cultivation. Parallel 
efforts were undertaken by the police to interdict the smuggling of coca 
leaves, cocaine, and precursor chemicals. The U.S. Government has, in 
large measure, financed the alternative development program and the 
police effort.

Bolivian President Hugo Banzer has pledged to wipe out illicit coca 
production and drug trafficking in Bolivia by the end of his term in 
2002. His administration unveiled its five-year counternarcotics 
strategy in December 1997. The plan calls for significant funding from 
international donors.

President Clinton certified to the Congress in 1998 that Bolivia is 
cooperating fully with the U.S. on counternarcotics matters or has taken 
steps on its own to achieve full compliance with the 1988 UN Convention 
Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. 
The U.S. Government is seeking Bolivia's cooperation in achieving a net 
reduction in the amount of coca under cultivation and in enacting 
legislation to criminalize money laundering. In 1996, the United States 
and Bolivia ratified a new extradition treaty which makes it easier for 
both nations to more effectively prosecute drug traffickers and other 
criminals. It replaces the previous extradition treaty, which came into 
force in 1990. The new treaty is significant because, unlike its 
predecessor, it requires both countries to extradite their own nationals 
for serious criminal offenses.

In 1991, the U.S. Government forgave all of the debt owed by Bolivia to 
the U.S. Agency for International Development ($341 million) as well as 
80% (or $31 million) of the amount owed to the Department of Agriculture 
for food assistance. Increased U.S. assistance since the late 1980s has 
been designed to reinforce democracy, to ensure sustainable economic 
development, and to make Bolivia less dependent on the cocaine industry. 
U.S. economic and development assistance totaled $64.5 million in FY 
1996, in addition to military and counternarcotics assistance. 

U.S. EMBASSY FUNCTIONS

In addition to working closely with Bolivian Government officials to 
strengthen our bilateral relationship, the U.S. Embassy provides a wide 
range of services to U.S. citizens and business. Political and economic 
officers deal directly with the Bolivian Government in advancing U.S. 
interests, but are also available to provide information to American 
citizens on general conditions in the country. Commercial officers work 
closely with dozens of U.S. companies which operate direct subsidiaries 
in the country. These officers provide information on Bolivian trade and 
industry regulations and administer several programs intended to aid 
U.S. companies starting or maintaining business ventures in Bolivia.

The consular section of the embassy provides vital services to the 
estimated 5,000 American citizens resident in Bolivia. Among other 
services, the consular section assists Americans who wish to participate 
in U.S. elections while abroad and provides U.S. tax information. 
Besides the American citizens living in Bolivia, some 25,000 U.S. 
citizens visit annually. The consular section offers passport and 
emergency services to these tourists as needed during their stay in 
Bolivia.

Principal U.S. Embassy Officials 

Ambassador--Donna J. Hrinak
Deputy Chief of Mission--Robert C. Perry
Political/Economic Counselor--Scott Danaher
Consul General--Jeanne Schulz
Director, Narcotics Affairs--Richard Baca
Director, USAID Mission--Frank Almaguer
Public Affairs Officer, USIS--Donald Terpstra
Defense Attache--Col. Gregory Landers, USAF
Commander, U.S. Military Group--Col. Dennis Keller, USA

The U.S. Embassy is located at Avenida Arce #2780, La Paz (tel. 591-2-
430251). There are consular agents in the cities of Santa Cruz (tel. 
591-3-330725) and Cochabamba (tel. 591-42-56714). Embassy Home Page: 
http://www/megalink.com/usemblapaz.

OTHER CONTACT INFORMATION:

U.S. Department of Commerce
International Trade Administration
Trade Information Center
14th and Constitution Avenue, NW
Washington, D.C. 20230
Tel: 800-USA-TRADE
Home Page: http://www.ita.doc.gov

American Chamber of Commerce in Bolivia
Edificio Hilda, Oficina 3
Avenida 6 de Agosto
Apartado Postal 8268
La Paz, Volivia
Tel: (591) 2-43-25-73
Fax: (591) 2-43-24-72
Home Page: http://www.bolivianet.com/amcham

ECONOMY

Bolivia's 1997 gross domestic product (GDP) totaled $8.0 billion. 
Economic growth has remained steady at about 4% a year (1.5% a year in 
per capita terms) over the 1988-97 period and real GDP grew by 4.1% in 
1997. Inflation declined from 8% in 1996 to 6.7% in 1997. The 
government's 1998 economic program has targeted GDP growth of 5% and an 
inflation rate below 6%.

Since 1985, the Government of Bolivia has been implementing a far-
reaching program of macroeconomic stabilization and structural reform 
aimed at restoring price stability, creating conditions for sustained 
growth, and alleviating poverty. Important components of these 
structural reform measures include the capitalization of state 
enterprises and strengthening of the country's financial system.

The most important recent structural changes in the Bolivian economy 
have involved the capitalization of numerous public sector enterprises. 
(Capitalization in the Bolivian context is a form of privatization where 
investors acquire a 50% stake and management control of public 
enterprises in return for a commitment to undertake capital expenditures 
equivalent to the enterprise's net worth). Parallel legislative reforms 
have locked into place market-oriented policies, especially in the 
hydrocarbon and mining sectors, that have encouraged private investment. 
Foreign investors are accorded national treatment, and foreign ownership 
of companies enjoys virtually no restrictions in Bolivia. As a 
consequence of these measures, 1996 private investment surged by 25% to 
an estimated $225 million and the privatization program has generated 
commitments of $1.7 billion in foreign direct investment over the period 
1996-2002.

In 1996, three units of the Bolivian state oil corporation (YPFB) 
involved in hydrocarbon exploration, production, and transportation were 
capitalized. The capitalization of YPFB allowed agreement to be reached 
on the construction of a gas pipeline to Brazil. A priority in the 
development strategy for the sector is the expansion of export markets 
for natural gas. The government intends to maintain its current contract 
for gas exports to Argentina through 1999. The contract to construct a 
pipeline to Brazil projects natural gas exports of 8 million cubic 
meters per day (cmd) by 1999, increasing to 16 million cmd by the eighth 
year of operation. The Bolivian Government has signed a financing 
contract for the Bolivian side of the gas pipeline with Petrobras and 
the capitalization of YPFB's transportation company will facilitate the 
finance, construction, and operation of the pipeline. The government 
plans to position Bolivia as a regional hub for exporting hydrocarbons.

Six smaller public enterprises were sold during 1996, and the Government 
of Bolivia has taken steps to improve the efficiency of some public 
services through concession contracts with private sector managers. All 
three major airports were transferred to private managers in March 1997, 
and a water supply company was transferred to a private operator in June 
1997. Also, by the end of 1996, almost all customs posts were under 
private management.

By May 1996, three of the four Bolivian banks that had experienced 
difficulties in 1995 were recapitalized and restructured under new 
ownership with support from the Bolivian Government's Special Fund for 
Strengthening the Financial System (FONDESIF), which helped restore 
confidence in the banking system. In November 1996, the Bolivian 
Congress approved a comprehensive pension reform that replaces the old 
pay-as-you-go system by a system of privately managed, individually 
funded retirement accounts, and the new system began operations in May 
1997. The reform represents a major step toward lasting fiscal 
consolidation in Bolivia.

Bolivian exports were $1.19 billion in 1997, from a low of $652 million 
in 1991. Imports grew in 1997 to a level of $1.74 billion, with import 
growth facilitated by the gradual reduction of Bolivian tariffs to a 
flat 10% (except for capital equipment, which has a 5% rate). Bolivia's 
trade deficit rose from $419 million in 1996 to $620 million in 1997.

Bolivia's trade with neighboring countries is growing, in part because 
of several regional preferential trade agreements it has negotiated. 
Bolivia is a member of the Andean Community and has free trade with 
other member countries (Peru, Ecuador, Colombia, and Venezuela). Bolivia 
began to implement an association agreement with MERCOSUR (Southern Cone 
Common Market) in March 1997. The agreement provides for the gradual 
creation of a free-trade area covering at least 80% of the trade between 
the parties over a 10-year period. The U.S. Andean Trade Preference Act 
(ATPA) allows numerous Bolivian products to enter the United States free 
of duty on a unilateral basis. Tariffs have to be paid on clothing and 
leather products only.

The U.S. remains Bolivia's largest trading partner. In 1997, the U.S. 
exported $295 million of merchandise to Bolivia and imported $223 
million, according to the World Trade Atlas of the Global Trade 
Information Service. Bolivia's major exports to the U.S. are tin, gold, 
jewelry, and wood products. Its major imports from the United States are 
computers, vehicles, wheat, and machinery. A Bilateral Investment Treaty 
is under negotiation.

Agriculture accounts for roughly 15% of Bolivia's GDP. The amount of 
land cultivated by modern farming techniques is increasing rapidly in 
the Santa Cruz area, where weather allows for two crops a year and 
soybeans are the major cash crop. The extraction of minerals and 
hydrocarbons accounts for another 10% of GDP. Bolivia is self-sufficient 
in oil and exports natural gas to Argentina. Manufacturing represents 
less than 17% of GDP.

The Government of Bolivia remains heavily dependent on foreign 
assistance to finance development projects. At the end of 1997, the 
government owed $4.23 billion to its foreign creditors, with $1.6 
billion of this amount owed to other governments and most of the balance 
owed to multilateral development banks. Most payments to other 
governments have been rescheduled on several occasions since 1987 
through the Paris Club mechanism. External creditors have been willing 
to do this because the Bolivian Government has generally achieved the 
monetary and fiscal targets set by IMF programs since 1987. The current 
IMF program, which consists of soft balance-of-payments loans from the 
enhanced structural adjustment facility as the government achieves 
certain targets, is a multi-year agreement ending in 1998.

Rescheduling agreements granted by the Paris Club have allowed the 
individual creditor countries to apply very soft terms to the 
rescheduled debt. As a result, some countries have forgiven substantial 
amounts of Bolivia's bilateral debt. The U.S. Government reached an 
agreement at the Paris Club meeting in December 1995 which reduced by 
67% Bolivia's existing debt stock. The Bolivian Government continues to 
pay its debts to the multilateral development banks on time and to 
receive soft loans. Bolivia has qualified for the Highly Indebted Poor 
Countries (HIPC) debt relief program.

GOVERNMENT AND POLITICAL CONDITIONS

The Banzer Government has committed itself to shutting down illegal coca 
cultivation and narcotrafficking during its five-year term. President 
Banzer has called for action against government and judicial corruption 
and has encouraged foreign investment as a means to stimulate economic 
growth and reduce poverty.

The 1967 constitution, revised in 1994, provides for balanced executive, 
legislative, and judicial powers. The traditionally strong executive, 
however, tends to overshadow the Congress, whose role is generally 
limited to debating and approving legislation initiated by the 
executive. The judiciary, consisting of the Supreme Court and 
departmental and lower courts, has long been riddled with corruption and 
inefficiency. Through revisions to the constitution in 1994, and 
subsequent laws, the government has initiated potentially far-reaching 
reforms in the judicial system and processes.

Bolivia's nine departments received greater autonomy under the 
Administrative Decentralization law of 1995, although principal 
departmental officials are still appointed by the central government. 
Bolivian cities and towns are governed by elected mayors and councils. 
The most recent municipal elections took place in December 1995. The 
Popular Participation Law of April 1994, which distributes a significant 
portion of national revenues to municipalities for discretionary use, 
has enabled previously neglected communities to make striking 
improvements in their facilities and services.

Principal Government Officials

President--Hugo BANZER Suarez
Vice President--Jorge QUIROGA Ramirez
Minister of Foreign Affairs--Javier MURILLO de la Rocha
Ambassador to the U.S.--Marcelo PEREZ Monasterios
Ambassador to the UN-vacant
Ambassador to the OAS--Marlene FERNANDEZ Granado

Bolivia maintains an embassy in the U.S. at 3014 Massachusetts Ave., NW, 
Washington, DC 20008 (tel. 202-483-4410); consulates in Los Angeles, San 
Francisco, Miami, New Orleans, and New York; and honorary consulates in 
Atlanta, Chicago, Cincinnati, Houston, Mobile, Seattle, St. Louis, and 
San Juan. 

FOREIGN RELATIONS

Bolivia traditionally has maintained normal diplomatic relations with 
all hemispheric states except Chile. Relations with Chile, strained 
since Bolivia's defeat in the War of the Pacific (1879-83) and its loss 
of the coastal province of Atacama, were severed from 1962 to 1975 in a 
dispute over the use of the waters of the Lauca River. Relations were 
resumed in 1975 but broken again in 1978 over the inability of the two 
countries to reach an agreement that might have granted Bolivia a 
sovereign access to the sea. In the 1960s, relations with Cuba were 
broken following Castro's rise to power, but resumed under the Paz 
Estenssoro Administration in 1985.

Bolivia pursues a foreign policy with a heavy economic component. 
Bolivia has become more active in the OAS, the Rio Group, and in 
MERCOSUR, with which it signed an association agreement in 1996. Bolivia 
promotes its policies on sustainable development and the empowerment of 
indigenous people.

Bolivia is a member of the UN and some specialized agencies and related 
programs; Organization of American States (OAS); Andean Pact; INTELSAT; 
Non-Aligned Movement; International Parliamentary Union; Latin American 
Integration Association (ALADI); World Trade Organization; Rio Treaty; 
Rio Group; MERCOSUR; and Uruguay, Paraguay, Bolivia (URUPABOL, re-
started in 1993). As an outgrowth of the 1994 Summit of the Americas, 
Bolivia hosted a hemispheric summit conference on sustainable 
development in December 1996. A First Ladies' hemispheric summit was 
also hosted by Bolivia that same month.

PEOPLE

Bolivia's ethnic distribution is estimated to be 56% indigenous people, 
and 42% European and mixed. The largest of the approximately three dozen 
indigenous groups are the Aymara, Quechua, and Guarani. There are small 
German, former Yugoslav, Asian, Middle Eastern, and other minorities, 
many of whose members descend from families that have lived in Bolivia 
for several generations.

Bolivia is one of the least-developed countries in South America. About 
two-thirds of its people, many of whom are subsistence farmers, live in 
poverty. Population density ranges from less than one person per square 
kilometer (km) in the southeastern plains to about 10 per square km. (25 
per sq. mi.) in the central highlands. Bolivia's high mortality rate 
restricts the annual population growth rate to around 2%.

La Paz is at the highest elevation of the world's capital cities--3,600 
meters (11,800 ft.) above sea level. The adjacent city of El Alto, at 
4,200 meters above sea level, is one of the fastest-growing in the 
hemisphere. Santa Cruz, the commercial and industrial hub of the eastern 
lowlands, also is experiencing rapid population and economic growth.

The great majority of Bolivians are Roman Catholic (the official 
religion), although Protestant denominations are expanding strongly. 
Many indigenous communities interweave pre-Columbian and Christian 
symbols in their religious practices. About half of the people speak 
Spanish as their first language. Approximately 90% of the children 
attend primary school, but often for a year or less. The literacy rate 
is low in many rural areas.

The cultural development of what is present-day Bolivia is divided into 
three distinct periods: pre-Columbian, colonial, and republican. 
Important archaeological ruins, gold and silver ornaments, stone 
monuments, ceramics, and weavings remain from several important pre-
Columbian cultures. Major ruins include Tiwanaku, Samaipata, Incallajta, 
and Iskanwaya. The country abounds in other sites that are difficult to 
reach and hardly explored by archaeologists.

The Spanish brought their own tradition of religious art which, in the 
hands of local indigenous and mestizo builders and artisans, developed 
into a rich and distinctive style of architecture, painting, and 
sculpture known as "Mestizo Baroque." The colonial period produced not 
only the paintings of Perez de Holguin, Flores, Bitti, and others but 
also the works of skilled, but unknown, stonecutters, wood carvers, 
goldsmiths, and silversmiths. An important body of native baroque 
religious music of the colonial period was recovered in recent years and 
has been performed internationally to wide acclaim since 1994.

Bolivian artists of stature in the 20th century include, among others, 
Guzman de Rojas, Arturo Borda, Maria Luisa Pacheco, and Marina Nunez del 
Prado.

Bolivia has rich folklore. Its regional folk music is distinctive and 
varied. The devil dances at the annual carnival of Oruro are one of the 
great folkloric events of South America, as is the lesser known carnival 
at Tarabuco. 

HISTORY

The Andean region probably has been inhabited for some 20,000 years. 
Beginning about the 2nd century B.C., the Tiwanakan culture developed at 
the southern end of Lake Titicaca. This culture, centered around and 
named for the great city of Tiwanaku, developed advanced architectural 
and agricultural techniques before it disappeared around 1200 A.D., 
probably because of extended drought. Roughly contemporaneous with the 
Tiwanakan culture, the Moxos in the eastern lowlands and the Mollos 
north of present-day La Paz also developed advanced agricultural 
societies that had dissipated by the 13th century of our era. In about 
1450, the Quechua-speaking Incas entered the area of modern highland 
Bolivia and added it to their empire. They controlled the area until the 
Spanish conquest in 1525.

During most of the Spanish colonial period, this territory was called 
"Upper Peru" or "Charcas" and was under the authority of the Viceroy of 
Lima. Local government came from the Audiencia de Charcas located in 
Chuquisaca (La Plata--modern Sucre). Bolivian silver mines produced much 
of the Spanish empire's wealth, and Potosi, site of the famed Cerro 
Rico--"Rich Mountain"-was, for many years, the largest city in the 
Western Hemisphere. As Spanish royal authority weakened during the 
Napoleonic wars, sentiment against colonial rule grew. Independence was 
proclaimed in 1809, but 16 years of struggle followed before the 
establishment of the republic, named for Simon Bolivar, on August 6, 
1825.

Independence did not bring stability. For nearly 60 years, coups and 
short-lived constitutions dominated Bolivian politics. Bolivia's 
weakness was demonstrated during the War of the Pacific (1879-83), when 
it lost its seacoast and the adjoining rich nitrate fields to Chile.

An increase in the world price of silver brought Bolivia a measure of 
relative prosperity and political stability in the late 1800s. During 
the early part of the 20th century, tin replaced silver as the country's 
most important source of wealth. A succession of governments controlled 
by the economic and social elites followed laissez-faire capitalist 
policies through the first third of the century.

Living conditions of the indigenous peoples, who constituted most of the 
population, remained deplorable. Forced to work under primitive 
conditions in the mines and in nearly feudal status on large estates, 
they were denied access to education, economic opportunity, or political 
participation.

Bolivia's defeat by Paraguay in the Chaco War (1932-35) marked a turning 
point. Great loss of life and territory discredited the traditional 
ruling classes, while service in the army produced stirrings of 
political awareness among the indigenous people. From the end of the 
Chaco War until the 1952 revolution, the emergence of contending 
ideologies and the demands of new groups convulsed Bolivian politics.

The Nationalist Revolutionary Movement (MNR) emerged as a broadly based 
party. Denied its victory in the 1951 presidential elections, the MNR 
lead the successful 1952 revolution. Under President Victor Paz 
Estenssoro, the MNR introduced universal adult suffrage, carried out a 
sweeping land reform, promoted rural education, and nationalized the 
country's largest tin mines. It also committed many serious violations 
of human rights.

Twelve years of tumultuous rule left the MNR divided. In 1964, a 
military junta overthrew President Paz Estenssoro at the outset of his 
third term. The 1969 death of President Rene Barrientos, a former member 
of the junta elected President in 1966, led to a succession of weak 
governments. Alarmed by public disorder, the military, the MNR, and 
others installed Col. (later Gen.) Hugo Banzer Suarez as President in 
1971. Banzer ruled with MNR support from 1971 to 1974. Then, impatient 
with schisms in the coalition, he replaced civilians with members of the 
armed forces and suspended political activities. The economy grew 
impressively during Banzer's presidency, but demands for greater 
political freedom undercut his support. His call for elections in 1978 
plunged Bolivia into turmoil once again. 

Elections in 1978, 1979, and 1980 were inconclusive and marked by fraud. 
There were coups, counter-coups, and caretaker governments. In 1980, 
Gen. Luis Garcia Meza carried out a ruthless and violent coup. His 
government was notorious for human rights abuses, narcotics trafficking, 
and economic mismanagement. Later convicted in absentia for crimes 
including murder, Garcia Meza was extradited from Brazil and began 
serving a 30-year sentence in 1995.

After a military rebellion forced out Garcia Meza in 1981, three other 
military governments in 14 months struggled with Bolivia's growing 
problems. Unrest forced the military to convoke the Congress elected in 
1980 and allow it to choose a new chief executive. In October 1982--22 
years after the end of his first term of office (1956-60)--Hernan Siles 
Zuazo again became President. Severe social tension, exacerbated by 
economic mismanagement and weak leadership, forced him to call early 
elections and relinquish power a year before the end of his 
constitutional term.

In the 1985 elections, the Nationalist Democratic Action Party (ADN) of 
Gen. Banzer won a plurality of the popular vote, followed by former 
President Paz Estenssoro's MNR and former Vice President Jaime Paz 
Zamora's Movement of the Revolutionary Left (MIR). But in the 
congressional run-off, the MIR sided with MNR, and Paz Estenssoro was 
chosen for a fourth term as president. When he took office in 1985, he 
faced a staggering economic crisis. Economic output and exports had been 
declining for several years. Hyperinflation had reached an annual rate 
of 24,000%. Social unrest, chronic strikes, and unchecked drug 
trafficking were widespread. 

In four years, Paz Estenssoro's Administration achieved economic and 
social stability. The military stayed out of politics, and all major 
political parties publicly and institutionally committed themselves to 
democracy. Human rights violations, which badly tainted some governments 
earlier in the decade, were not a problem. However, his remarkable 
accomplishments were not won without sacrifice. The collapse of tin 
prices in October 1985, coming just as the government was moving to 
reassert its control of the mismanaged state mining enterprise, forced 
the government to lay off over 20,000 miners. The highly successful 
shock treatment that restored Bolivia's financial system also led to 
some unrest and temporary social dislocation.

Although the MNR list headed by Gonzalo Sanchez de Lozada finished first 
in the 1989 elections, no candidate received a majority of popular votes 
and so in accordance with the constitution, a congressional vote 
determined who would be president. The Patriotic Accord (AP) coalition 
between Gen. Banzer's ADN and Jaime Paz Zamora's MIR, the second- and 
third-place finishers, respectively, won out. Paz Zamora assumed the 
presidency and the MIR took half the ministries. Banzer's center-right 
ADN took control of the National Political Council (CONAP) and the other 
ministries.

Paz Zamora was a moderate, center-left president whose political 
pragmatism in office outweighed his Marxist origins. Having seen the 
destructive hyperinflation of the Siles Zuazo Administration, he 
continued the neo-liberal economic reforms begun by Paz Estenssoro, 
codifying some of them. Paz Zamora took a fairly hard line against 
domestic terrorism, personally ordering the December 1990 attack on 
terrorists of the Nestor Paz Zamora Committee (CNPZ--named after his 
brother who died in the 1970 Teoponte insurgency) and authorizing the 
early 1992 crackdown against the Tupac Katari Guerrilla Army (EGTK). 

Paz Zamora's regime was less decisive against narcotics trafficking. The 
government broke up a number of trafficking networks but issued a 1991 
surrender decree giving lenient sentences to the biggest narcotics 
kingpins. Also, his administration was extremely reluctant to pursue net 
eradication of illegal coca. It did not agree to an updated extradition 
treaty with the U.S., although two traffickers have been extradited to 
the U.S. since 1992. Beginning in early 1994, the Bolivian Congress 
investigated Paz Zamora's personal ties to accused major trafficker 
Isaac Chavarria, who subsequently died in prison while awaiting trial. 
MIR deputy chief Oscar Eid was jailed in connection with similar ties in 
1994; he was found guilty and sentenced to four years in prison in 
November 1996. Technically still under investigation, Paz Zamora became 
an active presidential candidate in 1996. 

The 1993 elections continued the tradition of open, honest elections and 
peaceful democratic transitions of power. The MNR defeated the ADN/MIR 
coalition by a 34% to 20% margin, and the MNR's Gonzalo "Goni" Sanchez 
de Lozada was selected as president by an MNR/MBL/UCS coalition in the 
Congress. 

Sanchez de Lozada pursued an aggressive economic and social reform 
agenda. He relied heavily on successful entrepreneurs-turned-politicians 
like himself and on fellow veterans of the Paz Estenssoro Administration 
(during which Sanchez de Lozada was planning minister). The most 
dramatic change undertaken by the Sanchez de Lozada Government was the 
Capitalization program, under which investors acquired 50% ownership and 
management control of public enterprises, such as the state oil 
corporation, telecommunications system, electric utilities, and others. 
The reforms and economic restructuring were strongly opposed by certain 
segments of society, which instigated frequent social disturbances, 
particularly in La Paz and the Chapare coca-growing region, from 1994 
through 1996.

In the 1997 elections, Gen. Hugo Banzer, leader of the ADN, won 22% of 
the vote, while the MNR candidate won 18%. Gen. Banzer formed a 
coalition of the ADN, MIR, UCS, and CONDEPA parties which hold a 
majority of seats in the Bolivian Congress. The Congress selected him as 
president and he was inaugurated on August 6, 1997.

TRAVEL AND BUSINESS INFORMATION 

The U.S. Department of State's Consular Information Program provides 
Travel Warnings and Consular Information Sheets. Travel Warnings are 
issued when the State Department recommends that Americans avoid travel 
to a certain country. Consular Information Sheets exist for all 
countries and include information on immigration practices, currency 
regulations, health conditions, areas of instability, crime and 
security, political disturbances, and the addresses of the U.S. posts in 
the country.

Public Announcements are issued as a means to disseminate information 
quickly about terrorist threats and other relatively short-term 
conditions overseas which pose significant risks to the security of 
American travelers. Free copies of this information are available by 
calling the Bureau of Consular Affairs at 202-647-5225 or via the fax-
on-demand system: 202-647-3000. Travel Warnings and Consular Information 
Sheets also are available on the Consular Affairs Internet home page:  
and the Consular Affairs Bulletin Board (CABB). To access CABB, dial the 
modem number: (301-946-4400 (it will accommodate up to 33,600 bps), set 
terminal communications program to N-8-1 (no parity, 8 bits, 1 stop 
bit); and terminal emulation to VT100. The login is travel and the 
password is info (Note: Lower case is required). The CABB also carries 
international security information from the Overseas Security Advisory 
Council and Department's Bureau of Diplomatic Security. Consular Affairs 
Trips for Travelers publication series, which contain information on 
obtaining passports and planning a safe trip abroad, can be purchased 
from the Superintendent of Documents, U.S. Government Printing Office, 
P.O. Box 371954, Pittsburgh, PA 15250-7954; telephone: 202-512-1800; fax 
202-512-2250.

Emergency information concerning Americans traveling abroad may be 
obtained from the Office of Overseas Citizens Services at (202) 647-
5225. For after-hours emergencies, Sundays and holidays, call 202-647-
4000. 

Passport Services information can be obtained by calling the 24-hour, 7-
day a week automated system ($.35 per minute) or live operators 8 a.m. 
to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1-900-
225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat rate 
of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648).

Travelers can check the latest health information with the U.S. Centers 
for Disease Control and Prevention in Atlanta, Georgia. A hotline at 
(404) 332-4559 gives the most recent health advisories, immunization 
recommendations or requirements, and advice on food and drinking water 
safety for regions and countries. A booklet entitled Health Information 
for International Travel (HHS publication number CDC-95-8280) is 
available from the U.S. Government Printing Office, Washington, DC 
20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and 
customs regulations, legal holidays, and other items of interest to 
travelers also may be obtained before your departure from a country's 
embassy and/or consulates in the U.S. (for this country, see "Principal 
Government Officials" listing in this publication). 

U.S. citizens who are long-term visitors or traveling in dangerous areas 
are encouraged to register at the U.S. embassy upon arrival in a country 
(see "Principal U.S. Embassy Officials" listing in this publication). 
Registering with the embassy may help you to replace lost identity 
documents or help family members contact you in case of an emergency.

Further Electronic Information: 

Department of State Foreign Affairs Network. Available on the Internet, 
DOSFAN provides timely, global access to official U.S. foreign policy 
information. Updated daily, DOSFAN includes Background Notes; Dispatch, 
the official magazine of U.S. foreign policy; daily press briefings; 
Country Commercial Guides; directories of key officers of foreign 
service posts; etc. DOSFAN's World Wide Web site is at 
http://www.state.gov.

U.S. Foreign Affairs on CD-ROM (USFAC). Published on an annual basis by 
the U.S. Department of State, USFAC archives information on the 
Department of State Foreign Affairs Network, and includes an array of 
official foreign policy information from 1990 to the present. Contact 
the Superintendent of Documents, U.S. Government Printing Office, P.O. 
Box 371954, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or 
fax (202) 512-2250. 

National Trade Data Bank (NTDB). Operated by the U.S. Department of 
Commerce, the NTDB contains a wealth of trade-related information, 
including Country Commercial Guides. It is available on the Internet 
(www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at (202) 482-
1986 for more information.

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